HIMX Stock: Bullish Tailwinds Behind the Buzz

Himax Technologies, Inc. (NASDAQ:HIMX) stock is getting some buzz on a few message boards, so I decided to take look and see if the price charts can give me any insight into what is causing the buzz.
When I do due diligence on a company of focus, I start with looking at multiple perspectives. Imagine looking through a telescope or binoculars; one normally starts from a distant view, adjusts focus, and then zooms into the object. This process helps in pinpointing the object and deciphering a clear image. This describes my stock methodology in a nutshell.
My analysis below focuses on two price charts: one longer and one shorter in duration. These two time frames will help us ascertain a trading bias, so I will walk you through the information I gathered from each.
The following is a five-year chart of HIMX stock.
Chart Courtesy of www.stockCharts.com
Fibonacci retracement numbers (highlighted in green) are a very popular tool used by many technical traders. This tool is used to identify counter-trend price objectives. In theory, when a stock pulls back from a primary trend, shares will retrace approximately 50%–62% of the primary move. This zone usually offers support, as traders will be eyeing this area as an opportunity to enter long positions or cover short positions. It is normal to see chart congestion in this area. Traders refer to this zone as "trading into the box."
After HIMX stock peaked in 2014 around $14.00, shares sold off and found support at $5.80. This marked the Fibonacci 61.8% retracement and was the bottom end of the box. When shares fall into the box, it signals traders to cover on their short positions and to start building a long position. It is at this point where the weak hands are replaced with strong hands as equity positions are built. This also helps explain why the box is also acting as a base. The area has been tested numerous times in 2014 and 2015 and represents a major area of support.
In March 2016, HIMX stock reached $11.84. This is significant, because the share price was able to push above $9.97, marking a higher high (highlighted in pink). This price action is, by definition, an uptrend—another piece of evidence that the uptrend had resumed.
The following is a seven-month chart of HIMX stock.
Chart Courtesy of www.stockCharts.com
A downtrend line marks resistance that HIMX stock has failed to succumb to since March 2016. The downtrend line, highlighted in blue, is created connecting the peaks. A downtrend is defined by lower lows and confirmed by lower highs. It can easily be identified as price moves from the upper left to the lower right.
On August 12, HIMX broke above that downtrend and signalled a change in trend. The breakout is suggesting higher prices as the dominant trend from 2013 reasserts itself. The primary price objective of this trend reversal is the March high at $11.84. A close above this level would signal a move higher to test the all-time high around $14.00.

Bottom Line on HIMX Stock

I am of the opinion that HIMX stock is now on the verge of reasserting its bull market move higher that began in 2012. The evidence I presented above supports my opinion of higher prices. Perhaps the participants in the message boards are chartists like myself and some excitement is starting to spill over. I don’t know for sure; I can only speculate. It is worthy to note that if the share price of HIMX stock were to fall below the downtrend line and/or break below the support area marked by the Fibonacci retracement, I would have reason to believe that my premise is incorrect.

HIMX Stock: Bullish Tailwinds Behind the Buzz

Himax Technologies, Inc. (NASDAQ:HIMX) stock is getting some buzz on a few message boards, so I decided to take look and see if the price charts can give me any insight into what is causing the buzz.

When I do due diligence on a company of focus, I start with looking at multiple perspectives. Imagine looking through a telescope or binoculars; one normally starts from a distant view, adjusts focus, and then zooms into the object. This process helps in pinpointing the object and deciphering a clear image. This describes my stock methodology in a nutshell.

My analysis below focuses on two price charts: one longer and one shorter in duration. These two time frames will help us ascertain a trading bias, so I will walk you through the information I gathered from each.

Fibonacci retracement numbers (highlighted in green) are a very popular tool used by many technical traders. This tool is used to identify counter-trend price objectives. In theory, when a stock pulls back from a primary trend, shares will retrace approximately 50%–62% of the primary move. This zone usually offers support, as traders will be eyeing this area as an opportunity to enter long positions or cover short positions. It is normal to see chart congestion in this area. Traders refer to this zone as “trading into the box.”

After HIMX stock peaked in 2014 around $14.00, shares sold off and found support at $5.80. This marked the Fibonacci 61.8% retracement and was the bottom end of the box. When shares fall into the box, it signals traders to cover on their short positions and to start building a long position. It is at this point where the weak hands are replaced with strong hands as equity positions are built. This also helps explain why the box is also acting as a base. The area has been tested numerous times in 2014 and 2015 and represents a major area of support.

In March 2016, HIMX stock reached $11.84. This is significant, because the share price was able to push above $9.97, marking a higher high (highlighted in pink). This price action is, by definition, an uptrend—another piece of evidence that the uptrend had resumed.

A downtrend line marks resistance that HIMX stock has failed to succumb to since March 2016. The downtrend line, highlighted in blue, is created connecting the peaks. A downtrend is defined by lower lows and confirmed by lower highs. It can easily be identified as price moves from the upper left to the lower right.

On August 12, HIMX broke above that downtrend and signalled a change in trend. The breakout is suggesting higher prices as the dominant trend from 2013 reasserts itself. The primary price objective of this trend reversal is the March high at $11.84. A close above this level would signal a move higher to test the all-time high around $14.00.

Bottom Line on HIMX Stock

I am of the opinion that HIMX stock is now on the verge of reasserting its bull market move higher that began in 2012. The evidence I presented above supports my opinion of higher prices. Perhaps the participants in the message boards are chartists like myself and some excitement is starting to spill over. I don’t know for sure; I can only speculate. It is worthy to note that if the share price of HIMX stock were to fall below the downtrend line and/or break below the support area marked by the Fibonacci retracement, I would have reason to believe that my premise is incorrect.

Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners.

From: Michael Lombardi, MBASubject: Gold: The Stock Contrarian Investors’ Best Play of the Decade